Stock Focus Genting lures interest on possible Japan casino

by **Cals** Thu 24 Oct 2013, 11:37

Stock Focus Genting lures interest on possible Japan casino

Business & Markets 2013

Written by Jeffrey Tan of theedgemalaysia.com

Thursday, 24 October 2013 11:12

KUALA LUMPUR (Oct 24): Genting Bhd is in focus again following a foreign news report stating that Japanese authority has started to initiate a plan to liberalise casinos.
The mainly-gaming diversified group was one of the top gainers yesterday. It rose 30 sen to RM10.48 on trades of 5.26 million shares yesterday, but at 10.49 am today, it shed two sen to RM10.46.
Alliance Research, in a report today, said: “We are positive on the developments in Japan and expect buying interests to emerge in Genting.”
“If the casino bill is passed during the next legislative session, which begins in October, Japan could open its first casino resorts as early as 2019,” added the report.
According to the foreign news report, Japan is planning a legislation allowing gambling resorts to be developed in big cities and also in regional areas.
Alliance Research has maintained its ‘buy’ call on Genting Bhd shares at RM10.48 with an unchanged target price (TP) of RM11.24 in light of the foreign news report.
Its research analyst Cheah King Yoong said the most direct play on the gaming liberalisation in Japan will be Genting Singapore (non-rated), a subsidiary of Genting Bhd with 52% stake.
“We understand that Genting Singapore is mandated to represent Genting Group in bidding for the large scale gaming liberalisation in the Eastern region, including Japan,” he said.
Cheah noted Japan’s existing gaming market with a mere presence of Pachinko and Pachislo, a slot machine style game, has commanded lucrative industry revenue estimated to be about US$192 billion (RM606 billion).
“Judging from the recent developments, there is a fair chance for this bill to be passed, riding on strong approval ratings of Japan Prime Minister Shinzo Abe, who supports the casino plan,” he commented.
“Also, the upcoming hosting of the 2020 Summer Olympics by Tokyo may induce Japanese lawmakers to liberalise the sector to provide entertainment to visitors.”